China’s housing slump deepens as January prices post steepest annual drop in seven months. Earlier on this here:

adding a little more now:

Summary:

China new home prices fall 0.4% m/m, -3.1% y/y in January

Annual decline steepest in seven months

62 of 70 cities report price drops

Resale market weakness persists

“Three red lines” policy scrapped

Developer funding stress continues

Weak housing weighs on consumption and growth

China’s housing downturn deepened in January, with official data showing new home prices falling 0.4% month-on-month and 3.1% from a year earlier. The annual decline accelerated from December’s 2.7% drop, marking the steepest contraction in seven months and reinforcing concerns that the sector has yet to find a durable floor.

The weakness was broad-based. Of the 70 cities surveyed, 62 recorded price declines, up from 58 in the prior month. The secondary market also remained under pressure. While month-on-month declines in resale prices moderated slightly, year-on-year falls widened sharply, with tier-one city prices down 7.6% and smaller cities registering declines of more than 6%.

The property sector, once a central driver of China’s economic expansion, continues to weigh on household wealth and sentiment. Falling home values have constrained consumer spending at a time when policymakers are attempting to rebalance growth and offset external trade risks. Reviving domestic demand remains a core priority, but the persistent housing slump underscores the difficulty of restoring confidence.

Authorities have rolled out a range of supportive measures since the crisis began in 2021, including easing home purchase restrictions, lowering down-payment requirements and cutting mortgage rates. More recently, state media reported that regulators had removed the “three red lines” policy — caps on developers’ leverage ratios that were introduced in 2020 and widely seen as triggering a liquidity squeeze across the industry.

Despite the policy shift, funding strains remain acute. Many developers are still burdened by high debt levels and face challenges securing fresh financing. The sector is also adjusting away from the highly leveraged expansion model that powered the previous boom.

With price declines broadening and annual falls intensifying, January’s data suggests China’s property sector remains a drag on growth and financial stability.